This time last year, on Saturday mornings, I would have been rushing to the COOP Lutry Les Moulins, my local grocery store, to pick up almond milk, fish soup, coconut yogurt, two types of mushrooms, maybe a nutty ice cream, and a few other items—back then no one hoarded red sauce or toilet paper. I’d probably have stopped by the dry cleaner, Madame Sonia, and, once home, quite possibly would have needed to pack for an upcoming business trip. Thinking back to this former life, I am reminded of how much has changed. And I think, too, of the opportunities we now have to rethink what wasn’t working in our old “normal” and how we can create a new vision of the future. What changes can industries, companies, and brands make today to shape a better tomorrow? In this column, I will focus on retail, a prime example of an industry ripe for reinvention and next-generation marketing.
For some of us, online shopping has long been our go-to simply because of the convenience it offers; in Switzerland, a shopping collective, farmy.ch, delivers the goods of local bakers, butchers, even organic farmers and vineyards. Now, even as pandemic-related lockdowns ease, many more consumers are turning to digital channels and apps not so much for convenience or variety but as a safety precaution—with many venturing into online stores for the first time. Now that I’m back in the U.S., and out of quarantine, I finally was able to visit my old favorite, Stew Leonard’s, as well as Whole Foods last weekend, both times dressed for hazmat duties (at the latter, I discovered the benefits extended to Amazon Prime subscribers). For the most part, though, online shopping continues to be my default option. What used to be seen as a luxury has become the norm. In Europe, online orders were up 130% year-over-year in mid-April, most notably in grocery. China’s largest e-tailer, JD.com, reported a quadrupling of sales of some household staples over the same period in 2019. And e-commerce in the U.S. spiked 49% in April compared with early March, according to Adobe’s Digital Economy Index.
This shift online is having repercussions. The latest Retail World 2020 report, “Retailing in a Time of Crisis,” indicates that even if only half of COVID-19 e-grocery demand converts permanently, that’s still $200 billion in global sales moved online by 2021. (While back home on the U.S. east coast, I’ve become a regular e-shopper at Raw Generation, Omaha Steaks, Goldbelly, and My Grandma Baked a Cookie.) Higher online retail sales, in turn, are spurring announcements of physical store closures—among them, the global fast-fashion retailer Zara and American health and wellness retailer GNC. And we can expect more indoor malls to convert to much-needed housing. Just this afternoon, I read of new closures at the Stamford, Connecticut, mall, once upon a time a go-to place for us to shop and eat. Goodbye, Cheesecake Factory.
Keeping today’s new breed of hybrid consumers happy will require much more than the fast delivery of quality goods. Retailers will need to adapt quickly to shoppers’ evolving preferences and heightened expectations. Beyond the immediate need to secure business continuity, brands must reevaluate and define their strategies for an era in which more people are using their wallets to vote for change. As we move into this next phase, I am seeing three primary areas of focus for brands and marketers.
1. Insisting on equity
Retailers can’t afford to stand only for profits today. Consumers expect brands to use their influential platforms and policies to support and drive change. We have certainly seen that in the long-overdue global movement to end systemic racism and secure social justice sparked by the death of George Floyd.
In the U.S., several retailers, including Walmart, Walgreens, and CVS, have announced that they will no longer lock up Black beauty and personal care products in anti-theft cases—a policy that was the target of a 2018 lawsuit but only changed as a result of recent social media pressure. Retail shelves also are beginning to shed racial stereotypes, including with the renaming of the Aunt Jemima brand and promises of a new visual brand identity for Uncle Ben’s. The directive is clear: Uplifting messages of equality and inclusion aren’t enough; consumers want to see brands take measurable action to address racial inequities. (For years, my partner, Jim, a defender of the rights of indigenous peoples, has been railing against cultural appropriation, especially the naming and symbols of the Cleveland Indians and the Washington Redskins, two sports teams whose logos exploit and sometimes denigrate Native Americans. But, this is for another column.)
“Customers are researching companies to make sure they know from whom they are buying and what these companies support,” said Shannelle Armstrong Fowler, a small-business owner and adjunct professor, Columbia College Chicago. “Consumer activism is disrupting retail and e-commerce with real and immediate consequences. Consumers can voice their immediate support of causes on social media and purchase from brands that support the same causes in less than 60 seconds. E-boycott is real, and influence is far-reaching with damning consequences.”
2. The disrupted retail landscape
Retailers also must adapt to shifting realities in the COVID-19 era. In New York City, the NoMo Soho hotel is pitching its rooms not to travelers but to nearby remote workers needing a change of venue for a few hours. Have you noticed that video-call backgrounds have become the new fashion accessory? NoMo has. In addition to offering desks, snacks, and Wi-Fi, the hotel is positioning its views of the Manhattan skyline as the perfect backdrop for virtual meetings. We’ll also see the smart use of technology to create retail and marketing experiences suited to the new normal that’s beginning to take shape. U.K.-based mobile operator O2, for instance, has instituted a virtual queuing system to reinforce in-store social distancing measures; what’s more, it’s now marketing the system to other retailers. The success of fast-casual restaurant Panera’s augmented reality coffee mornings shows promise for adding a visual element to takeout orders. And Kanye West’s new Yeezy Supply website is breaking the rules of traditional e-commerce by merging storytelling with a virtual shopping experience—think of it as Cher’s revolving wardrobe in Clueless brought to a whole new level.
To thrive in the emerging retail landscape, brands will need to do more than recreate the traditional retail experience for the virtual shopper. We’ll need to find ways to build meaningful connections and interactions that genuinely engage.
3. Money on the mind
Those who have ventured out to brick-and-mortar shops as lockdowns ease will have noticed sale signs in nearly every window. But, as contributors to the World Retail Congress 2020 Report note, these deep discounts aren’t having the desired impact. The consumer mood has shifted, financial uncertainty is still at the forefront of most people’s minds, and, for many, buying power has changed.
This doesn’t mean consumers have stopped spending. As I noted earlier, online sales in several categories have ticked upward. And the days of the car boot sale are back as secondhand goods are also gaining in value, according to a new report from online consignment store ThredUp. Demand is driven mainly by Gen-Z and Millennial shoppers who are seeking both value and sustainability. “Vintage” is no longer just distinctive; it’s eco-friendly.
Connecting directly with artisans, upcyclers, and recyclers also holds appeal for the new shopper. “E-commerce starts to level the playing field for smaller businesses that previously could not compete against the giants. My first stop now when I want to buy something is Etsy, and I’ve found more local suppliers for my business,” said Kathryn Sheridan, CEO and founder of Sustainability Consult in Brussels, Belgium.
In these extraordinary times, brands can connect with customers in more essential ways—including by actively supporting social progress, reimagining their offerings and points of connection, and providing added value in line with current consumer sentiment, consciousness, and consumption trends.
Where will you start?